The 'license' meta-data option is not listed under:

http://docs.python.org/distutils/setupscript.html#meta-data

There are others, too, from:

$ python setup.py --help
.. snip ..
Information display options (just display information, ignore any commands)
 --help-commands     list all available commands
 --name              print package name
 --version (-V)      print package version
 --fullname          print <package name>-<version>
 --author            print the author's name
 --author-email      print the author's email address
 --maintainer        print the maintainer's name
 --maintainer-email  print the maintainer's email address
 --contact           print the maintainer's name if known, else the author's
 --contact-email     print the maintainer's email address if known, else the
                     author's
 --url               print the URL for this package
 --license           print the license of the package
 --licence           alias for --license
 --description       print the package description
 --long-description  print the long package description
 --platforms         print the list of platforms
 --classifiers       print the list of classifiers
 --keywords          print the list of keywords
 --provides          print the list of packages/modules provided
 --requires          print the list of packages/modules required
 --obsoletes         print the list of packages/modules made obsolete